your key practice metrics, used in combination, are an incredible indication of
how well your practice is going to do in the future, how competitive you can
really be in your marketplace, and what you can expect out of your practice in
terms of financial growth. Once you understand these two metrics, how they work
together, and what actions you can take to impact them, growing a dominating
chiropractic practice begins relatively simple.
the two practice metrics I’m referring too? I’m glad you asked. When combined, your cost to acquire a new
patient and the lifetime value of the average active patient tell us almost
everything we need to know about your practice.
Before I explain why, let’s lay out some simple definitions of these two
to acquire a new patient is the average dollar amount you invest to get one new
patient. For instance, if you invest
$2,000 on marketing in a single month and end the month with 10 new patients,
your cost of acquisition is $200 per new patient. Your lifetime patient value, arguably the
most important number in any chiropractic practice, is the average dollar value
of an average patient over the life of their care with you. To calculate this metric for a given period
of time, simply take the total amount of revenue your practice generated during
the time period and divide it by the total number of patients you had from the
beginning of the time period. The number
you end up with is what’s known as the lifetime value of a patient.
chiropractor who calculates and reviews these two metrics on a regular basis
has already given themselves an advantage over other doctors, even if nothing
else changes. Why? Well, for one, when
used together, these metrics tell us exactly how well your marketing dollars
are working. Without knowing and
understanding these two metrics a chiropractor has no way of knowing whether
they should be spending less or more to acquire a new patient. For instance, is a cost of $500 to acquire a
single new patient good or bad? Well, it all depends. If the average patient is worth $700 to your
practice (avg. lifetime patient value), $500 acquisition cost isn’t very
good. However, if the average patient is
worth $3,000, $500 acquisition cost is great.
In fact, if your average patient is worth $3,000, you should be willing
to spend $500 to acquire a new patient as often as possible. However, if a patient is worth just $500 –
looking into the future - you could see how you would quickly go cash-flow
negative continuing with those kind of acquisition costs.
Hence, our crystal ball reference.
But, believe it or not, that’s not even what makes this combination of metrics worthy of being referenced as the two most important numbers in your practice. What does? It’s simple. The doctor who has the lowest acquisition costs with the highest lifetime patient value is the one who has the greatest competitive advantage. With a focus on impacting these two numbers, you not only can predict your practice future, you can control it.
Todd Brown, CEO of More Chiro Patients, Inc., is the creator of the Free Chiropractic Marketing Video entitled, “The Ultimate Patient Attraction System”. To instantly get your copy, visit www.FreeChiropracticVideo.com